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Hermes is the off-chain operator layer historically used with Dynamic Vault. It monitors markets and submits vault transactions, but it is not a separate on-chain account model in the vault program. The on-chain program recognizes two authorities for strategy operations:
  • the vault admin
  • the vault operator
Hermes normally acts through the configured operator authority.

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What Hermes Can Submit

For rebalance vaults, the admin or operator can submit: These actions are constrained by the same account checks as any other caller. The strategy must be listed on the vault, the reserve and collateral vault must match the strategy account, and the fee vault must match the vault.
For the current JupLend strategy handler, rewards accrue through the collateral token. Its claim_rewards implementation is effectively a no-op.
Allocation choices, market monitoring, APY comparison, utilization checks, and rebalance thresholds are off-chain operator policy. They are not formulas enforced by the vault program.

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What Hermes Cannot Do Through The Vault Program

Hermes cannot use the strategy instructions to bypass vault accounting.
  • It cannot deposit into a strategy that is not listed on the vault.
  • It cannot claim rewards to a token account that is not owned by the treasury address.
  • It cannot mint user LP shares outside the deposit flow.
  • It cannot burn user LP shares outside the withdrawal flow.
  • It cannot set the fee vault, transfer admin, update locked-profit degradation, or add/remove strategies unless it is also the admin.

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Relationship To On-Chain Accounting

Hermes can decide when to submit a rebalance, but the vault program decides whether the accounts are valid and how the result is accounted for. The accounting details for deposit_strategy and withdraw_strategy are covered in Rebalance Crank.

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Practical Risk Model

Hermes matters operationally because a delayed or misconfigured operator can miss yield opportunities or leave too much liquidity in a less attractive strategy. The program still limits the operator to approved vault flows.
Off-chain allocation algorithms and risk scoring are not guaranteed by the on-chain program. Integrators should treat them as operational behavior and verify the current operator configuration for any live vault they integrate.